The Not-for-Profit Corporations Act –
Which Organizations are Affected by the Reform
Upon Proclamation the new legislation will affect approximately 46,000 organizations incorporated in Ontario under the current Corporations Act.
A small group of Ontario not-for-profit corporations will not be affected. For example, not-for-profit cooperative corporations that are governed by the Ontario Co-operative Corporations Act and corporations incorporated federally under the Canada Corporations Act will not be affected.
Some Ontario not-for-profit corporations are incorporated by special or private acts or by other public acts. Depending on the circumstances, the new Act may apply or the specific governing statute may take priority. For example, municipalities will not be affected by the reform and will continue to be governed by the Municipal Act.
Some other special circumstances include:
- share capital social clubs, such as golf clubs or cottager associations, are currently governed under the Corporations Act. They will have up to five years after the new Not-for-Profit Corporations Act comes into force to choose whether they will continue under the new Act or under the Ontario Business Corporations Act (as a share capital corporation) or the Co-operative Corporations Act (as a share capital or non-share capital co-operative corporation).
- insurance companies incorporated under the current Corporations Act will continue to be governed by the current Corporations Act.
- not-for-profit social enterprises will continue to be permitted to operate in Ontario under the new Act. The new Act would clarify that not-for-profit corporations can engage in commercial activities that support their not-for-profit purpose. The new Act would not apply to a for-profit corporation engaged in social enterprise activities.
The Not-for-Profit Corporations Act’s impact on charities is discussed in the next section.
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